With Paylib, French Banks Work Together To Compete With PayPal

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Three major French banks have worked together on a new payment system for the web called Paylib. With a Paylib account, users will be able to pay on the web using a simple login and password instead of having to enter all their credit card information. The user experience should be similar to paying with your PayPal account, and it will make even more sense on mobile. Multiple ecommerce websites are already on board.

BNP Paribas, Société Générale and La Banque Postale are the three initial banks, but it’s an open standard. They hope that more French banks will join them. In total, 23 million users can already pay using Paylib, compared to 7 million PayPal users in France.

When you first use Paylib, you have to select the credit card to link with your Paylib account. In addition to the login and password, users will have to enter a second code from the companion app on their smartphones. It’s very reminiscent of Google’s two-step verification process.

While anybody can start processing payments through Paylib, the solution will remain restricted to the French market as only French banks are part of the initiative. One of the incentives for merchants is that the processing fee is lower than PayPal’s processing fee (usually around 3 percent in France).

Working together is the only way that French banks could come up with a compelling alternative to PayPal and soon-to-be-launched Stripe. Yet, French authorities are following Paylib very closely. The service could create antitrust issues.

If Paylib can partner with more banks, it could become a competitive payment processor in France, giving a lot of power to the major French banks.